The Rags-to-Riches Story of How Oprah Made Billions

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   Oprah Winfrey with Barack and Michelle Obama. Source: Flickr user Luke Vargas. Licensed under Creative Commons Attribution-Share Alike 2.0 via Wikimedia Commons. 

Oprah Winfrey's story reminds us what makes America great.

Born in poverty to an unwed teen mother in rural Mississippi, Winfrey became a millionaire by age 32 and is now a multibillionaire. Here's the remarkable story of how she did it and what you can do to follow her pathway to success.

Rags to riches
As a child, Oprah spent her first few years living with her maternal grandmother. Hattie Mae Lee was so poor that she often made Oprah wear dresses made out of potato sacks. Oprah was also the victim of sexual assault as an adolescent. However, Oprah's fortunes began to turn around in her teen years while she was living with her father, Vernon Winfrey, in Nashville, Tenn. Vernon made his daughter's education a priority, and she became an honors student.

While in high school, Oprah joined the speech team and worked for a local black radio station. She eventually earned a full scholarship to Tennessee State University, where she majored in communications. From there her career in media began to blossom. Oprah soon became Nashville's first black female news anchor, and from there she went to Baltimore to co-anchor the 6 p.m. news. Eventually she made her way to Chicago to host a low-rated half-hour morning talk show called AM Chicago. Within months she turned that show into the top-rated talk show in Chicago. The show was soon renamed The Oprah Winfrey Show and syndicated nationally, turning Oprah into a millionaire.

How Oprah became a billionaire
Oprah was in a position to negotiate the ownership of her show as it went national, which put her on the pathway to becoming a billionaire. By assuming ownership of her show and then starting her own production company, Oprah was able to participate in the wealth The Oprah Winfrey Show was creating. Her production company produced spinoff shows for popular guests on her program, namely,
Dr. Oz, Dr. Phil, and Rachael Ray. Her business also diversified into producing movies, magazines, and radio shows.

In less than a decade, Oprah's net worth ballooned to $340 million, and she surpassed Bill Cosby as the wealthiest African-American. In 2006, Oprah was the highest-paid TV entertainer in the U.S., earning an estimated $260 million that year.

Oprah's income has fallen in recent years, and she "only" pulled in $75 million last year now that her show is off the air. However, her wealth has never been determined solely by her salary, but rather the value of her business. Today, her vast media empire is valued at about $3 billion.

At $3 billion in net worth, Oprah ranks No. 210 among the wealthiest people in the United States, according to Forbes. While her fortune pales in comparison to the top two on the list -- Bill Gates is worth $81 billion, and Warren Buffett is worth $67 billion -- Oprah is nonetheless fabulously rich. For example, she's a few spots above Dallas Mavericks owner and Shark Tank star Mark Cuban. She's also the 26th-wealthiest woman in America, with a net worth $1 billion above that of Hewlett-Packard CEO Meg Whitman. Oprah is North America's only black billionaire and the seventh-richest black person in the world. She has more wealth than Michael Jordan, Tiger Woods, and Will Smith combined.

How to follow Oprah's path to riches
While Oprah has always been a well-paid celebrity, her wealth comes from owning a great business and investing in great brands. 
While few of us can start successful production companies and invest early in rising TV stars, we can invest in the success of strong brands with solid businesses, much like Oprah's. Brands like Coca-Cola  and Procter & Gamble have stood the test of time and earned their investors strong returns year after year. These are brands that billionaire investor Buffett includes in his portfolio. While these stocks alone might not put our name next to Oprah's on Forbes' list of America's wealthiest, they can put us on the pathway to financial security and a worry-free retirement. 

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The smartest investors know that dividend stocks are great for building long-term wealth. That's beyond dispute. They also know that a well-constructed dividend portfolio creates wealth steadily, while still allowing you to sleep like a baby. Knowing how valuable such a portfolio might be, our top analysts put together a report on a group of high-yielding stocks that should be in any income investor's portfolio. To see our free report on these stocks, just click here.

The article The Rags-to-Riches Story of How Oprah Made Billions originally appeared on

Matt DiLallo has the following options: long January 2016 $40 calls on eBay, short October 2014 $52.5 calls on eBay, long January 2015 $35 calls on Coca-Cola, and long January 2016 $35 calls on Coca-Cola. The Motley Fool recommends Coca-Cola, eBay, and Procter & Gamble. The Motley Fool owns shares of eBay and has the following options: long January 2016 $37 calls on Coca-Cola and short January 2016 $37 puts on Coca-Cola. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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